When looking around for a hire car, many people will check models, prices and special deals, often comparing several car hire companies to find the deal that is right for them. Yet strangely, when thinking about insurance for car rental many people tend not to shop around and take ‘as is’ the insurance sold by the car rental company they have selected.
This may be missing an opportunity and could be wasting money. Contrary to popular belief, the renter is not obliged to pay for the additional insurance offered by car rentals companies and better deals may be available elsewhere.
To look at this, let us think for a second about the insurance for car rental that comes included in the car rental price. In some countries this may be so limited as to be zero. All insurance you require such as third party liability (to cover other parties you may injure in an accident) or CDW (this is insurance against damage to the rented car itself) may have to be purchased separately to the rental cost.
In other countries the rental price may include third party, theft and perhaps even CDW, but this basic cover needs to be examined carefully. It is worthwhile asking whether or not the third party cover is sufficient for your needs because although by law it is unlimited in the UK, in other countries the policy may have a ‘maximum payout’ level specified that could be inadequate. It’s also useful to look at the CDW cover. That’s because typically the basic CDW insurance for car rental provided by a car rental company will exclude several areas of the vehicle from cover such as the tyres, wheels, roof and windows. These are all some of the most commonly and expensively damaged areas of a car even in minor accidents.
It is also highly likely that the basic insurance for car rental that comes from the rental company will carry what’s called excess. The excess is essentially the financial contribution that the renter will have to pay following an accident even if insured. The excess amount will usually be set between 500 and 1500 pounds sterling so if the vehicle is damaged to a cost of 1000 pounds and there is a 500 pound excess on the policy, then the renter will need to pay 500 pounds towards the repair costs.
These gaps in cover can be a serious worry for renters, and the car rental company will very probably try to sell additional or ‘top-up’ insurance to do things such as reduce the excess payable or increase cover to excluded areas of the vehicle etc. This is where many renters just say ‘yes’ and where a little shopping around may save money.
The additional top-up insurance offered by car rental companies can be expensive and significantly cheaper alternatives for this insurance can often be found online through specialist insurance companies and brokers. Their policies work on the basis that if you have to pay the rental company excess following an accident, the insurance company will reimburse you. This also applies to things such as covering the excluded areas of vehicles and increasing third party liability cover if necessary.
Insurance for car rental cover offered by the direct insurance companies and brokers also offers flexibility because it is sold to a policyholder and not just a single rental agreement. This means if the renter takes out an annual policy, this would cover them for all rented vehicles driven in that given 12-month period. This could offer flexibility benefits and again, it will probably save significant amounts of money. As an option, it may be worth checking out.
Tags: Insurance For Car Rental